According to the Ontario Securities Commission (OSC), crypto exchange Binance has rescinded its agreement to follow requirements that were agreed previously. The regulator was informed by the crypto exchange that beginning December 31st, there would not be any new transactions that involve Ontario residents. However, in a surprising turnaround, the exchange recently informed Ontario residents that they no longer needed to close their accounts by the year end. On Thursday, the exchange had gotten into hot water with the OSC. In June, Binance had notified its Ontario users that they may have to close their accounts because it was becoming a restricted jurisdiction.
However, on Wednesday, a letter was sent to the users by the exchange, which said that there wasn’t any need for Ontario regulators to close their accounts by December 31st, 2021 because of the ongoing and positive cooperation with the regulators in Canada. The exchange had also told the users that Binance had taken its first successful steps on the regulatory path in Canada because it had registered with the FINTRAC as a money service business. It said that thanks to this registration, they could continue to offer their services in the country, along with resuming their business in Ontario while they seek full regulation.
But, a notice was issued by the Ontario Securities Commission on Thursday, which notified investors that the exchange wasn’t registered under Ontario’s securities law. The regulator said that Binance had informed the OSC staff that now new transactions would be made by Ontario residents after the end of 2021. The regulator elaborated that Binance had rescinded its commitment without notifying the OSC and this was unacceptable. The Canadian regulator stressed that there wasn’t a single entity belonging to the Binance group of companies that could claim of having any kind of securities’ registration.
This means that Binance does not have the authority to offer securities or trading in derivatives to companies or people located in the province. The OSC also said that any unregistered platforms would be subject to action, which would include temporary orders, and this could result in their local operations being impacted. The regulator further added that there were a total of six crypto asset trading platforms that were registered in Ontario. This is certainly not the first time that Binance has gotten into hot water and it appears to be dealing with a great deal of regulatory pressure of late.
Other than Canada, the world’s leading crypto exchange in terms of trading volume has gotten into hot water with regulators in jurisdictions like South Africa, the United Kingdom, the United States, Norway, Hong Kong, Netherlands, Malaysia, Italy, Germany, Lithuania, Turkey, Singapore, Australia and India. According to the exchange, compliance has become its main focus. The Central Bank of Bahrain had given Binance in-principle approval this week regarding setting up a crypto service provider in the country. This was a move in the exchange’s favor after it has had to deal with a myriad of setbacks because of increased scrutiny from regulators all over the world.